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Audit (A-07-11-03167)

03-25-2014
Not All of Nebraska's Controls for Its Child Care Subsidy Program Claims Were Effective

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Summary

The Nebraska Department of Health and Human Services (State agency) did not always have effective controls for its Child Care Subsidy Program, which is funded in part by the Child Care and Development Fund Federal program. We identified at least 1 control deficiency in 32 of 100 childcare claims reviewed and estimated that, as a result, the costs affected by these control deficiencies totaled approximately $16.4 million ($8.8 million Federal share).

The State agency's lack of sufficient written policies and procedures was the primary cause for ineffective controls over the Child Care Subsidy program. Without written policies and procedures, the State agency's Child Care Subsidy program is vulnerable to fraud, waste, and abuse.

We recommended that the State agency improve its controls for client and provider eligibility determinations and for claims processing to ensure that payments for the Child Care Subsidy program are made for eligible clients and to eligible providers. Specifically, the State agency should take steps to develop written policies and procedures that will (1)ensure that background checks, including criminal history checks and other state registry checks, are documented; (2) validate that the units and rates paid to providers are in accordance with the State's established maximum payment amounts; (3) ensure that providers are being paid only for childcare that they provided during approved hours; (4) maintain documentation to demonstrate that all clients are U.S. citizens or qualified aliens; and (5) maintain documentation to demonstrate that all clients are eligible based on the age requirements.

The State agency neither agreed nor disagreed with our recommendations. However, the State agency's comments described procedures that it had implemented, or said it would implement, to address some of our findings.

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